Who Is Norman Hsu?

Norman Hsu raised millions for Democratic candidates, writing big checks and bundling even more. All that has changed, as news of Hsu's bankruptcies and questionable business practices have made headlines.

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MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

MICHELE NORRIS, host:

And I'm Michele Norris.

And almost every day, we're learning more about the mysterious Democratic fundraiser, Norman Hsu. Until two weeks ago, Hsu was one of Hillary Clinton's most prodigious fundraisers. But since then, he's run from the law, threatened suicide and forced the campaign to return hundreds of thousands of dollars in contributions. He's currently being held in Colorado. He's expected to return to California for his sentencing on a 15-year-old grand theft charge.

NPR's Peter Overby has been examining Hsu's political connections, while Scott Horsley has been studying his business record. Together, they have filed this report. We'll start with Peter.

PETER OVERBY: Like many of the best money raisers, Norman Hsu came from the world of business - soft-spoken but eager, so eager to please. John Catsimatidis is a businessman and Democratic fundraiser in New York City. He remembers when Hsu appeared during the 2004 John Kerry campaign.

Mr. JOHN CATSIMATIDIS (Businessman and Democratic Fundraiser): He just showed up one day, and about a couple of years ago. And he seemed like a very pleasant guy. And he was very well dressed. And nobody thought anything of it.

OVERBY: They're thinking about it now. But as Hsu built a golden reputation as a political moneyman, his back-story lay hidden.

SCOTT HORSLEY: On paper, Norman Hsu has some impressive credentials. Born in Hong Kong, educated at Berkeley and the Wharton School, in the 1980s, he was featured in the business press as a successful fashion entrepreneur. But Hsu also has a more ominous paper trail, lawsuits filed by disgruntled investors, a bankruptcy and a criminal record for grand theft.

Orthodontist Britta Tomer is a one-time investor who soured on Hsu. In the 1980s, she and her partner, David Chien(ph), helped bankroll one of his California ventures.

Ms. BRITTA TOMER (Orthodontist): It sounded, in a way, good. I was a little bit suspicious about it, but we did invest, both him and I. We did invest $20,000 each. That I remember.

HORSLEY: Tomer says she quickly got cold feet and demanded her money back, but she says her partner's investment was lost. The pair sued in 1988, alleging fraud. Within two years, Hsu had filed for bankruptcy. Authorities say at least one of Hsu's California businesses was an illegal Ponzi scheme. He reportedly raised more than $1 million from investors for the purpose of buying and reselling latex gloves.

Although some early investors did make money, authorities say there's no evidence any gloves were actually bought or sold. The latex scheme led to a grand theft charge 15 years ago to which Hsu pleaded no contest. But before he could be sentenced, he disappeared. Since then, Hsu traveled to Hong Kong and back to the U.S., keeping a relatively low profile, until he began making a name for himself as a big political contributor.

OVERBY: Since 2003, Norman Hsu made personal contributions to 27 congressional Democrats and seven party committees. More than 40 percent of his contributions came this year. He also gave to charities, the Innocence Project, which reexamines death-penalty cases, and the Clinton Global Initiative. He contributed and got on the board of The New School, a university in Manhattan. As for raising money from others, the practice known as bundling, that information isn't normally disclosed. The Clinton campaign says Hsu was one of their very top bundlers, HillRaisers, the campaign calls them.

John Catsimatidis says a bundler starts by pledging to raise a certain amount for the candidate.

Mr. CATSIMATIDIS: And, you know, a person is expected to hold up to their word.

OVERBY: How often do they actually hold up to their word?

Mr. CATSIMATIDIS: I would say 50 percent.

OVERBY: Okay. What do you think his average was? Do you have any idea?

Mr. CATSIMATIDIS: I think his average is close to 100. That's why everybody liked him.

OVERBY: A bundler needs to have persuasion and persistence. Norman Hsu had both. His bundling totals are estimated to run more than $1 million - perhaps 70 percent of it for Hillary Clinton. Now, Democrats wonder how he did that. They also wonder why. They remember hearing him say that he loves Democrats, loves the Democratic Party.

But John Catsimatidis says that unlike most bundlers, Hsu never seemed to expect anything in return. He didn't care about issues. And he never talked about his business.

Mr. CATSIMATIDIS: Very little. I asked him, once or twice, and he said he was in, you know, the schmatte business.

HORSLEY: That's Yiddish for the garment business. By the beginning of this decade, Hsu had established himself in the role of a New York City garment executive. A woman named Yau Cheng began investing with Hsu in 2001, according to her lawyer. And those early investments were successful.

Over the next six years, she and a partner recruited other investors, ultimately raising tens of millions of dollars. They were told their money was being used to finance Chinese apparel companies manufacturing goods for high-end retailers, including Gucci and Prada. As with the earlier latex venture, though, there are holes in this story. For one thing, Gucci and Prada say they've never done business with Hsu or his company, Components Ltd.

The investors began to get nervous when Hsu's old legal troubles resurfaced, and especially after he failed to show up for a court hearing in California last week, forfeiting $2 million bail. Days later, when investors tried to cash some of Hsu's checks, they were told the account had insufficient funds.

On the run once again, Hsu reportedly sent a suicide note to several associates last week, then boarded an Amtrak train bound from California to Chicago. He stayed locked in his room so long, fellow passenger Joanne Segale began to worry about him.

JOANNE SEGALE (Train Passenger): His room, when the train would shift, the curtains would go in five or six inches. And I could see somebody on the floor, wedged.

HORSLEY: Segale ultimately called train personnel for assistance. And Hsu was held off the train in Grand Junction, Colorado, where he's now back in custody. Segale says train workers found a bottle of prescription drugs and pills scattered around his cabin. Investors, meanwhile, have asked the New York District Attorney's Office to investigate the garment scheme. Their lawyer won't say whether investors were swayed by Hsu's political contributions, but at least four people connected with the investors' group made maximum contributions to Hillary Clinton's campaign on the same day, March 28th.

OVERBY: But by this spring, Norman Hsu's world was on the brink. Questions were surfacing about his business practices. In August, more questions about his fundraising and about the 1992 bench warrant. Democrats quickly dumped his personal contributions. Barack Obama sent $7,000 to charity, Hillary Clinton, $23,000. And now, Clinton is doing what no presidential candidate has done before - giving back all of the $850,000 that Hsu had raised from 260 donors. On Wednesday, in a conference call with reporters, Clinton acknowledged the blow to her presidential bid. This audio comes from DiversityInc magazine.

Senator HILLARY RODHAM CLINTON (Democrat, New York): It was very difficult for us to make any decision other than returning the contributions that were in any way connected to him. And that's what we decided to do.

OVERBY: The suspicion, which the FBI is looking into, is that Hsu or someone else illegally gave money to some of the donors to cover the contributions. The campaign hopes that many of the other donors will decide to recontribute.

This is Peter Overby.

HORSLEY: And I'm Scott Horsley, NPR News.

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Democratic Fundraiser Hsu Had Troubled History

Norman Hsu

Fugitive fundraiser Norman Hsu leaves the San Mateo County jail after posting a $2 million bond, Aug, 31, 2007, in Redwood City, Calif. Justin Sullivan/Getty Images hide caption

itoggle caption Justin Sullivan/Getty Images

What is a Bundler?

Norman Hsu, the fugitive fundraiser who brought in hundreds of thousands of dollars for Hillary Clinton, was one of the campaign's top "bundlers." Bundlers are the super fundraisers of the presidential campaigns. A primer on how they work.

The mysterious Democratic fundraiser Norman Hsu remains in a Colorado jail Friday, where he is being held in lieu of $5 million bail. He is expected to return to California soon to be sentenced for a 15-year-old grand theft charge.

Until two weeks ago, Hsu was one of Hillary Clinton's most prodigious fundraisers, bringing in some $850,000 for the New York senator's presidential campaign. Since then, Hsu has run from the law, threatened suicide, and forced the campaign to return all of the money he raised.

Even now, little is known about how Hsu got involved in politics, or where his money came from.

"He just showed up one day, a couple of years ago," said John Catsamitidis, a businessman and Democratic fundraiser in New York City. "He seemed like a very pleasant guy, he was very well dressed, and nobody thought anything of it."

California Roots

On paper, Hsu has some impressive credentials. Born in Hong Kong, he was educated at the University of California, Berkeley and the University of Pennsylvania's Wharton School. In the 1980s, he was featured in the business press as a successful fashion entrepreneur.

But Hsu also has a more ominous paper trail: lawsuits filed by disgruntled investors, a 1990 bankruptcy, and a criminal record for grand theft.

Authorities say at least one of Hsu's California businesses was an illegal Ponzi scheme. He reportedly raised more $1 million from investors for the purpose of buying and reselling latex gloves. Although some early investors did make money, authorities say there's no evidence any gloves were actually bought or sold.

The latex scheme led to a grand theft charge 15 years ago, to which Hsu pleaded no contest. Before he could be sentenced in 1992, he disappeared.

Since then, Hsu has traveled to Hong Kong and back to the U.S. He kept a relatively low profile until he began making a name for himself earlier this decade as a big political contributor.

Political Money Man, or 'Bundler'

Hsu's political contributions began in 2003 and accelerated in 2007. He has personally contributed to 27 congressional Democrats and seven party committees. More than 40 percent of his contributions came this year alone.

He also gave to charities, including the Innocence Project, which re-examines death penalty cases, and the Clinton Global Initiative. He has been a donor and a board member of the New School, a university in Manhattan.

In addition to his own contributions, Hsu helped recruit other political donors, a process known as "bundling." Although campaigns are not required to report bundling totals, Hillary Clinton's presidential campaign says Hsu was one of her very top bundlers, or "HillRaisers," as the campaign calls them.

Fundraiser Catsimatidis says while many bundlers promise to raise big sums, Hsu actually delivered.

"I would say his average was close to 100 (percent). That's why I really like him," Catsimatidis said.

A bundler needs to have persuasion and persistence. Hsu had both. His bundling totals are estimated in the low millions, including $850,000 for Hillary Clinton.

Hsu's motives are not clear. He talked about loving the Democratic Party. But Catsimatidis says he never asked for anything in return, like other bundlers. And he never talked about his business.

A Questionable Garment Business

By the beginning of this decade, Hsu had established himself in the role of a New York City garment executive. His campaign disclosure forms list a half-dozen firms where he supposedly worked as a director, a designer or president. Only two of the firms are registered with New York authorities, though. And only one of the listings is still active.

A woman named Yau Cheng began investing with Hsu in 2001. Her early investments were successful, according to Cheng's lawyer, Seth Rosenberg. Over the next six years, Cheng and a partner recruited other investors, ultimately raising tens of millions of dollars. They were told their money was being used to finance Chinese apparel companies manufacturing goods for high-end retailers, including Gucci and Prada.

As with Hsu's earlier latex venture, though, there are holes in this purported business plan. For one thing, Gucci and Prada say they've never done business with Hsu, or his company, Components Ltd.

The Law Catches Up

The investors began to get nervous when Hsu's old legal troubles resurfaced — especially after he failed to show up for a court hearing in California on Sept. 5, forfeiting $2 million in bail. Days later, when investors tried to cash some of Hsu's checks, they were told the account had insufficient funds, Rosenberg said.

On the run once again, Hsu reportedly sent a suicide note to several associates, then boarded an Amtrak train bound from California to Chicago. He stayed locked in his room so long, a fellow passenger began to worry about him.

"His room — when the train would shift, the curtains would go in five or six inches. And I could see somebody on the floor, wedged," said Joann Segale, who had the train cabin opposite Hsu's.

Segale ultimately called train personnel for assistance, and Hsu was helped off the train in Grand Junction, Colo. Segale says train workers found a bottle of prescription drugs and pills scattered around his cabin.

"He was very ill, very incoherent," Segale said. "But when they picked him up, he said, 'Am I in jail? Am I in jail?' And they said, 'No, you're not in jail. You're in Colorado.'"

Further Legal Woes

Hsu's attorney says he will waive extradition in order to return to California and deal with the old grand theft charge. Meanwhile, investors in New York have asked the district attorney's office to investigate his more recent garment ventures. According to the Wall Street Journal, investors are concerned that $40 million has gone missing.

Attorney Rosenberg won't say whether investors were moved to invest by Hsu's political contributions, or if he ever pressed them to make contributions of their own. Federal campaign records show at least four people connected to the investors' group made maximum contributions to Hillary Clinton's campaign on the same day, March 28.

As suspicion mounted over Hsu's record, Democrats quickly dumped his campaign contributions. Illinois Sen. Barack Obama donated $7,000 to charity, Hillary Clinton donated $23,000.

In addition, Clinton is doing what no presidential candidate has done before: returning $850,000 that Hsu helped raise from other donors.

"It was very difficult for us to make any other decision, other than to return the contributions connected to him, and that's what we decided to do," Clinton said Wednesday, in a conference call with reporters.

The suspicion is that Hsu or someone else may have reimbursed some donors for the contributions, in violation of federal law. The campaign hopes many of the other donors will decide to contribute again.

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